100 days at Bertelsmann: an interview with CFO Bernd Hirsch

CFO Bernd Hirsch

Bernd Hirsch had his first day as Bertelsmann CFO at the beginning of April. Since then, a hundred days have passed. Commenting on his first hundred days in office, the new Chief Financial Officer says: “Bertelsmann has a gratifyingly open culture coupled with a keen interest in new people like me.” He says this made his start easier – a start he greatly looked forward to and prepared for intensively. Now Hirsch says he has arrived, but above all he feels welcome.

Mr. Hirsch, after 100 days in office, do you feel you have arrived and above all been accepted at Bertelsmann?

Bernd Hirsch: Both - and really from day one. Right from the start, I felt very welcome both here at the Corporate Center and among my financial counterparts in the divisions. Bertelsmann has a gratifyingly open culture prevails coupled with a keen interest not only in new things, but also in new people like me. So I’ve had extremely positive interpersonal experiences, and at all levels: I’ve had some very good conversations with the shareholders so that the necessary relationship of trust can form. I’m in close consultation with Thomas Rabe – we have very similar ideas. On the Executive Board overall, we also treat each other constructively, in the awareness of being jointly responsible for the company’s management and wanting to steer it in the same direction. In my team I have discovered excellent, passionate financial professionals who are simply fun to work with. And the same applies to the Bertelsmann financial community. In short, today I sometimes think I’ve been here a lot longer than just a few months, even if it’s clear to me, of course, that as a newcomer I still need to find my place in the company.

Were there any surprises?

Bernd Hirsch: I’ve neither been surprised - nor have I been a source of surprises. Both of these things were important to me. And for this reason, or simply because of my line of work, I prepared myself very intensively for Bertelsmann and my new job. So I was aware beforehand of how broad our company’s portfolio is, but once you’re on the inside and can take an even deeper look at the businesses, the diversity of Bertelsmann has proven quite impressive for me – but not surprising.

Why did you choose Bertelsmann?

Bernd Hirsch: Because I wanted a challenging environment. And I’ve found it at Bertelsmann. I already said it at the Management Meeting, Bertelsmann is not a place for people who want to rest and relax. The all-encompassing transformation to digital, accelerating globalization, and increasing volatility in the financial markets are all challenges that demand answers, but also enormous rapidity and flexibility in our decision-making. The beauty is that Bertelsmann has precisely this dynamic and is willing to try new paths. I’m also looking forward to now getting to know the media world from the inside. It’s fascinating to see how media are created, how they develop and how they work. However, the Arvato services businesses are no less interesting. Bertelsmann has built up tremendous expertise there as well.

How would you define the job of CFO? Do you see differences between the CFO positions you previously occupied and Bertelsmann?

Bernd Hirsch: The common opinion is that the finance department always has the same tasks, regardless of the industry and business. But my aspiration as CFO but was never to just look after “the figures.” In my opinion, this is an antiquated image of a CFO that no longer applies. Today, a CFO needs to develop a deep understanding, perhaps even a passion for the business, the products and the processes. He needs to understand exactly what the business does, because he is involved in all the major decision-making processes of these businesses, even providing the basis for such decisions, for example ones about investment.

Before this, you had only been CFO at listed companies – does that perhaps result in differences?

Bernd Hirsch: Yes, and no. Generally, there are two major differences between listed and privately owned companies. One is the long-term view that private companies can take, especially on risky subjects. They do not need to think in terms of quarters, and quite specifically can accept such things as startup losses. This is an enormous advantage in the kind of transformation process Bertelsmann is currently going through. The other difference is that there is a natural discipline at listed companies due to increased publicity and control. But both differences are, as I said, more a matter of principle, because from what I have experienced at Bertelsmann so far, the long-term thinking of a private company is connected to the discipline of a listed company here. And of course we, too, have to be fit for the capital markets and be guided by international accounting and corporate governance standards. We do this rather well, incidentally.

Does Bertelsmann’s decentralized structure present you with new challenges?

Bernd Hirsch: No. I’ve always enjoyed working in decentralized companies. I like such an environment more than centrally managed organizations, because I prefer to convince people about something, rather than order them to do it. In the end, persuasion always leads to more sustainable results. In the process it is important that you have a clear focus and a clear goal and communicate it clearly and unambiguously. Therefore, I see communications as an important task in a company’s finance department.

When you spoke at the Management Meeting in Gütersloh you praised Bertelsmann’s current financial situation. Is the situation really so rosy or are there also sticking points when you take a closer look?

Bernd Hirsch: The fact that Bertelsmann is financially so entirely sound puts the company in a good starting position for implementing our strategy, of course. However, we always have to be aware that Bertelsmann has a substantial financial limitation on the future transformation of its business: Bertelsmann is not listed, and so self-financing remains the dominant theme.

And that is why, as you also said at the Management Meeting, “cash is king”?

Bernd Hirsch: Yes, exactly. It’s one of two key factors: Bertelsmann needs a constantly high cash flow to further reduce debt and obtain more freedom for investment. The Group also needs profitable growth, i.e. more revenue, but also to be more profitable.

How does a numbers man relax?

Bernd Hirsch: With my wife and three children at home in southern Germany or playing sports.

Your hobbies of diving and kickboxing don’t exactly sound relaxing.

Bernd Hirsch: They are actually. They complement each other perfectly. Kickboxing is about exhausting yourself, while diving is about total relaxation. Just the fact that there is silence underwater allows me to come down completely.